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Editorial Comment — February 2014

THE EXCHANGE CONNECTION ...

During any of this drawn-out
high-stakes tug-of-war over
commissary funding, transportation
funding, and defense vs. civilian budgets
in general, has anyone in government
really thought much about
its impact on military exchanges: the
goods and services they provide on
base, the Morale, Welfare and Recreation
(MWR) dividends they generate,
the family programs they help
support?

While 2013's sequestration furloughs
and government shutdown
clearly hurt patrons, commissary sales
and customer satisfaction, what seems
to have been totally overlooked is the
impact on exchange sales. And if the
commissary benefit is compromised,
whether by closures, or the latest
dumb-ass proposal — raising commissary
prices to nonappropriated
fund (NAF) levels — so too will the
exchanges be compromised. Many
commissary customers are extremely
price sensitive; they combine shopping
trips; and they have little time
and scant resources to waste. They
need the right mix of products at the
right price. Military family shoppers
will be hit directly in the pocketbook
if commissary prices are increased.
And that will have a domino effect on
exchange shopping trips and earnings.

If any changes to compensation
are made that disrupt commissary
savings or DeCA's value proposition
— or that force assortments into a
pricing corner that turns customers
away — they will also stymie much
of the exchange systems' hard work
to capture shopping trips and generate
sales and dividends.

MWR is already under pressure;
those family and morale services are
hard enough to fund already without
adding a reduction in dividends to
their problems.

Exchanges go where the armed
forces go, anywhere in the world; they
go where they must because they are
needed. Let's not make their work unsustainable
by short-sighted policy
making; instead, let's give the entire
system the support it needs to perform
its vital mission.

STOP. RIGHT. THERE. ...

When the smoke is so thick
that you know there's a fire,
it is just not enough to say “there are
no plans to burn down the house.”

The same goes for Department of
Defense (DoD) leadership when the
response to news reports of back-room
plans to slash commissary funding is
an unconvincing “no commissaries are
closing” … but by the way, we have
this plan to raise commissary prices.

Stop. Right. There. That is a military
pay cut, and it's a pay cut felt most
deeply by those career families who
are the very backbone of the force.

Congress and the administration
urgently need to get behind servicemen,
servicewomen and their families
and let the Pentagon's leadership and
finance department know in no uncertain
terms that such a proposition
is unacceptable, a non-starter in any
form that diminishes or destroys the
benefit.

Let there be no doubt in anyone's
mind that there is a fine line, especially
on pricing and assortment, which if
crossed would spell disaster for the
commissary benefit. The NAF model
that has been proposed for commissaries
is one that will at the very least
erode and could easily torpedo the
benefit in its entirety — taking along
with it the DeCA workforce (a double
hit to that part who are military family
members), the members of other
organizations such as the National
Industries for the Blind employed
within it, or those who supply it with
merchandise, and the entire segment
of U.S. industry that supports it.

Members of Congress and congressional
staff will need to exercise
the utmost care as they look for
solutions to plug any funding gaps.
Prices cannot be raised across the
board — because not all products
carry the same margins or provide
anywhere near the same savings. Plain
and simple, retail does not work like
that. Raise any high-cost, low-margin
“must-have” item by a point too
much, and the customer will not make
the trip. The difference cannot be recaptured
by raising prices in meat,
dairy and produce, or any other of the
commissary's “destination” (i.e., highest
savings) categories. DoD cannot
afford to experiment with the commissary;
the margin for error is too
narrow. There is a delicate balance
between sustaining this benefit that
is so important to so many military
families and retirees, or destroying it.

Do not be fooled into thinking
there is a simple solution to squeezing
commissary funding. Active duty,
reserve, retiree … military family livelihoods
hang in the balance, and our
nation's men and women in uniform
should be treated with the respect they
have earned through their service.

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